WASHINGTON (AFP) – The International Monetary Fund on Thursday said the dollar was overvalued on currency markets, while the euro, yen and pound were in line with fundamentals.

"The real effective exchange rates of Japan, the euro area, and the UK all appear broadly in line with medium-term fundamentals, while the US dollar is on the strong side of fundamentals," the IMF said in a report to the Group of 20 economic powers.

The IMF noted that recent government interventions in the foreign-exchange market had contributed to the imbalance, which has sparked fears of "currency wars" to protect exports amid the global economic recovery.

"While advanced economies have generally avoided intervening in currency markets, some have intervened more recently to limit rapid appreciations, contributing to the above-mentioned tension on this issue."

The IMF reiterated its view that China's currency, the yuan, remained "substantially undervalued."

The IMF prepared the report for a G20 meeting of financial ministers and central bank governors in South Korea on October 22-23, in preparation for a G20 summit in mid-November.

Since then the dollar has been relatively stable. The US currency had weakened sharply between mid-September and mid-October amid expectations that the Federal Reserve would restart major large-scale asset purchases to support a flagging recovery, effectively printing money.

In a final statement the G20 finance chiefs agreed to "refrain from competitive devaluation of currencies" and aim for "more market-determined exchange rate systems."

The IMF was empowered to police the agreement, which however lacks teeth in the absence of numerical targets for countries such as China to lower their swollen trade surpluses.

The IMF noted tensions among the G20 developed and developing members stemming from currency imbalances in part propelled by large capital inflows to fast-growing emerging economies as investors seeking higher-yielding returns.

Key emerging surplus economies, notably in Asia, have responded to the capital inflows by intervening in foreign-exchange markets to accumulate reserves and limit currency appreciation, the Washington-based institution said.

Meanwhile, some other emerging economies, notably South Africa and countries in Latin America, have allowed their currencies to appreciate "substantially," boosting real-effective exchange rates to levels that appear increasingly overvalued, it warned.

"The significant cross-country differences in the extent of de facto exchange rate flexibility and the limited scope for policy responses in countries receiving large inflows is stirring some tension across G20 members," the 187-nation IMF said.

The United States, burdened with a massive trade gap with China, is the leading critic of Beijing's currency policy. Washington accuses China of keeping the yuan undervalued to make its exports cheaper and gain an unfair trade advantage.

However, many emerging markets including China suspect that the United States is deliberately allowing the dollar to flounder on currency markets so that it can export its way back to prosperity.

Some 160 questions have been placed on statewide ballots, including 42 "citizen initiatives," and voters will face scores more from their municipal or county governments.

That's down sharply from previous years when controversial measures like gay marriage were used to boost voter turnout and drive national policy.

"It costs a lot of money to get an initiative on the ballot," said Jeannie Drage Bowser, a ballot initiative expert with the bipartisan National Conference on State Legislatures.

With the country still reeling from the worst economic downturn since the Great Depression, fundraising for ballot initiatives has taken a hit.

The sponsors of some initiatives, however, have had no trouble raising money.

The oil industry funded a 3.6 million dollar initiative to suspend California's greenhouse gas emission limits until after the state's unemployment rate drops to 5.5 percent or lower and stays there for a full year.

Retailer Costco and two liquor wholesalers spent 3.1 million dollars on measures which would allow private retailers to sell liquor and shut down state-run state liquor stores in Washington state.

And the American Beverage Industry broke a new record for ballot initiative funding with a nearly 17 million dollar effort to eliminate a tax on bottled water, soda and candy in Washington state.

"It is a powerful example of the impact of corporate money on campaigns," Bowser told AFP.

Not all the initiatives are funded by corporations: the Humane Society is behind a measure to tighten regulation of dog breeders and make "puppy mill cruelty" a crime in Missouri.

And billionaire George Soros donated a million dollars Tuesday to an effort to fully legalize -- and tax -- marijuana in California.

California was the first state to legalize the use of marijuana for medical purposes in 1996 and since then 14 other states have passed similar laws.

Arizona and South Dakota could soon join that list if voters there pass a medical marijuana initiative on the ballot.

There could be a lot more smoke in South Dakota if voters also pass an initiative to repeal tobacco smoking restrictions.

Many of the questions which made it onto the ballot focus on budgets and taxes.

Lawmakers in several states are seeking permission from voters to raise some taxes and user fees, increase their "rainy day" funds and make it easier to pass controversial budgets by switching to a simple majority vote instead of requiring two thirds approval.

Voters in nine states will also weigh in on measures that will significantly hit state revenues, including tax cuts and efforts to change the way schools are funded or impose harsher sentences on criminals.

Some of the most draconian initiatives are in Colorado.

Voters there will mull a series of measures that would slash taxes while shifting responsibility for 1.6 billion dollars in education funding to the state.

A study found this would leave legislators with just 38 million dollars in their general fund to spend on everything from keeping prisons open to keeping the lights on in the state capital.

"The people proposing these haven't said how the state should cope should these amendments pass," Bowser said, adding the measures would save Colorado families an average of 1,360 a year.

There is just one "culture war" initiative on the ballot this year: a move to amend Colorado's constitution to define the term "person" so that legal rights begin "from the moment of fertilization" and abortion becomes murder.

However, voters in Arizona, Colorado and Oklahoma are considering measures to block the implementation of the Obama administration's sweeping health care reform which has been much maligned by his political opponents.

The nation's largest chemical manufacturer said it's seeing a solid recovery in demand in North America and Europe with "momentum" in emerging countries. Dow said its third-quarter results give it "confidence that a sustained global economic recovery, led by emerging economies, is firming despite headwinds."

Its shares rose 5 cents to $31.26 in morning trading.

The Midland, Mich., company said its net income fell to $512 million, or 45 cents per share, from $711 million, or 63 cents per share, a year ago.

Excluding one-time items for restructuring and acquisitions among other things, the company said it earned 54 cents per share in the most recent quarter.

Revenue rose 7 percent to $12.87 billion from $12.1 billion a year ago. Emerging economies like those in Brazil, Asia, the Middle East and Eastern Europe now make up about a third of Dow's sales.

Analysts polled by Thomson Reuters, who usually exclude one-time items from their estimates, expected earnings of 41 cents a share on revenue of $12.81 billion.

The company said its major markets like electronics, coatings, automotive and packaging continue to show strength despite continued high unemployment and continued weakness in construction.

Demand in North America and Europe was "particularly strong" for lubricants and other heat transfer fluids used in solar power applications.